Elan Microelectronics Corporation v. Apple, Inc.

Filing 158

Memorandum in Opposition to Apple Inc.'s Motion to Dismiss Elan's Inequitable Conduct Defense and Counterclaim ( 131 ) filed byElan Microelectronics Corporation. (DeBruine, Sean) (Filed on 8/6/2010) Modified on 8/9/2010 (tsh, COURT STAFF).

Elan Microelectronics Corporation v. Apple, Inc.

Doc. 158

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Yitai Hu (SBN 248085) ([e-mail]) Sean P. DeBruine (SBN 168071) ([e-mail]) Elizabeth H. Rader (SBN 184963) ([e-mail]) Jennifer Liu (SBN 268990) ([e-mail]) ALSTON & BIRD LLP 275 Middlefield Road, Suite 150 Menlo Park, California 94025 Telephone: [phone] Facsimile: 650-838-2001 T. Hunter Jefferson (admitted pro hac vice) ([e-mail]) ALSTON & BIRD LLP One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309 Telephone: [phone] Facsimile: 404-881-7777 Attorneys for Plaintiff and Counterdefendant ELAN MICROELECTRONICS CORPORATION UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION ELAN MICROELECTRONICS CORPORATION, Plaintiff and Counterdefendant, v. APPLE, INC., Defendant and Counterplaintiff. AND RELATED COUNTERCLAIMS DATE: TIME: JUDGE: CTRM: August 5, 2010 1:30 p.m. Richard Seeborg Courtroom 3, 17th Floor Case No. 09-cv-01531 RS ELAN MICROELECTRONICS CORPORATION'S OPPOSITION TO APPLE INC.'S MOTION TO DISMISS ELAN'S INEQUITABLE CONDUCT DEFENSE AND COUNTERCLAIM

ELAN'S OPPOSITION TO APPLE'S MOTION TO DISMISS ELAN'S INEQUITABLE CONDUCT DEFENSE AND COUNTERCLAIM

Case No. 09-cv-01531 RS

Dockets.Justia.com

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. B. 2. III. I. II.

TABLE OF CONTENTS Page INTRODUCTION ..........................................................................................................1 STATEMENT OF FACTS .............................................................................................2 A. B. C. The '218 Patent ...................................................................................................2 Cirque Corporation's 1994 GlidePoint® Touch Pad ..........................................3 Elan's Allegations For Its Inequitable Conduct Counterclaim ...........................4

ARGUMENT ..................................................................................................................6 A. Elan's Inequitable Conduct Allegations Plead With Particularity Sufficient to Satisfy FRCP 9(b) and the Exergen Standard...............................................................................................................6 1. Elan's Inequitable Conduct Allegations Plead With Particularity Who Made Material Misrepresentations and Withheld Material Information From the Patent Office.......................................................................................................6 Elan's Inequitable Conduct Allegations Also Plead With Particularity Why the GlidePoint® Touch Pad Is Material and Not Cumulative Information..............................................7 Elan's Inequitable Conduct Allegations Further Plead With Particularity A Factual Basis to Infer Intent to Deceive..................................................................................................10

3.

Apple's Motion Should Be Denied Because Elan's Pleading Provides Far More Than Vague Allegations of Apple's Inequitable Conduct ..........................................................................................12 Even If the Court Holds Elan's Inequitable Conduct Allegations Insufficient, Elan Should Be Permitted to Amend Its Pleading ........................................................................................................12

C.

CONCLUSION .............................................................................................................13

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TABLE OF AUTHORITIES Page
CASES

Cal. Inst. of Tech. v. Canon U.S.A., 2009 U.S. Dist. LEXIS 126174 (C.D. Cal. Oct. 26, 2009) ............................................................ 12 Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309, 1314 (Fed. Cir. 2006).............................................................................................. 8 Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327-30 (Fed. Cir. 2009) ............................................................................... passim General Electro Music Corp. v. Samick Music Corp., 19 F.3d 1405, 1411 (Fed. Cir. 1994)................................................................................................ 7 GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274 (Fed. Cir. 2001)............................................................................................ 11 In re Omeprazole Patent Litig., 483 F.3d 1364, 1371 (Fed. Cir. 2007).............................................................................................. 8 Kalman v. Kimberly-Clark Corp., 713 F.2d 760, 771 (Fed. Cir. 1983).................................................................................................. 8 Molins PLC v. Textron, Inc., 48 F.3d 1172, 1180 (Fed. Cir. 1995).............................................................................................. 11 Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1561 (Fed. Cir. 1983).............................................................................................. 7
STATUTES

35 U.S.C. § 102(g)(2)........................................................................................................................... 8
RULES

Federal Rule of Civil Procedure 15(a)(2)........................................................................................... 13 Federal Rule of Civil Procedure 9(b) ....................................................................................... 6, 12, 13
REGULATIONS

37 C.F.R. § 1.56 ................................................................................................................................... 8

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I.

INTRODUCTION Apple moves to strike Elan's counterclaim that one of the patents asserted by Apple is

unenforceable due to inequitable conduct, essentially arguing that it suffers from a technical pleading defect and must be repleaded. To the contrary, Elan included very specific and legally sufficient allegations to support its claims. This is not a "fishing expedition" in which Elan casually alleged inequitable conduct in its first pleading responding to Apple's infringement allegations, hoping to find the evidence to support its claim later. Rather, Elan's pleading sets forth in detail the "who, what, when, where, and how" of the material misrepresentations of fact and withholding of material prior art form the United States Patent and Trademark Office ("PTO" or "Patent Office") that Elan has learned from discovery. In particular, Elan alleges that at least named inventor Mark Della Bona, as well as the other named inventors and the attorneys involved in prosecuting the patent application, were involved in the inequitable conduct. Elan alleges that Mr. Della Bona knowingly misrepresented the state of the prior art, in light of his admitted knowledge in mid-1994 of the prior art GlidePoint® touch pad product. Elan's pleading also fully describes why the GlidePoint® product, with the exact features described and claimed as novel in the U.S. Patent No. 5,764,218 ("the '218 patent"), was highly material to the patent claims, but was not disclosed to the Patent Office. Elan's pleading alleges the "when and where," namely that the material misrepresentations were made in the patent application filed on January 31, 1995. Elan raised this defense and counterclaim only after it received relevant documents from Apple and after it took the deposition of Apple's inventor Mark Della Bona. In that deposition Mr. Della Bona admitted that he knew about the GlidePoint® touch pad at the time it was introduced in 1994 and knew that it enabled the use of "taps" of the touch pad instead of mechanical mouse button clicks to invoke "click" "double click" and "click and drag" functions. Despite that knowledge, the '218 patent application stated that no such touch pad existed in the prior art and claimed these very features as Apple's invention. Thus, because Elan's pleading sets forth who made the false statement to the Patent Office, what false statement was made, why the false statement was material and not cumulative to the
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information already of record, where can the material misrepresentations can be found in the patent application, and how the examiner would have used this material information in assessing the patentability of the claims of the '218 patent. The pleading also alleges facts that support a reasonable inference that Apple's inventors and attorneys made those false statements and withheld the GlidePoint® prior art from the Patent Office with the intent to deceive the Patent Office. Apple's motion attacking Elan's pleading on hyper-technical grounds has no merit and should therefore be denied. II. A. STATEMENT OF FACTS The '218 Patent Claim 1 of the '218 patent pertains to a method of operating a touch-sensitive computer input device to provide "cursor control operations." Declaration of Sean DeBruine in Support of Elan's Opposition to Apple's Motion to Dismiss ("DeBruine Decl."), Ex. A ('218 patent) at 13:2841. The method uses time intervals during which the user contacts the touch surface, and gap intervals between such contacts, to distinguish among three such operations. Id. Apple contends that the "cursor control operations" include a button click in response to a brief tap on the touch pad, followed by a relatively long absence or gap; a double click in response to two brief taps with a short gap time in between; and a drag operation resulting from a brief tap followed quickly by a prolonged contact to move the cursor. See Apple's Opening Claim Construction Brief (Dkt. No. 85) at 27:7-16. In each of these operations, and others, the user's gestures on the touch pad surface produce the same result as clicking the mechanical button found on computer mice and most touch pads. In Apple's patent application, Apple and its inventors made several affirmative representations that they were the first to invent a touch pad that could provide such control functions without the need to press mechanical buttons. For example, the patent application states: Consequently, in order to perform click, double-click, and drag operations, prior art touch pads not only require the use of a touch pad but also require the use of a mechanical button switch.

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DeBruine Decl., Ex. F ('218 patent application) at 3:6-8 (emphasis added). The application continues: Thus, there is a need in the field of computer interfaces for an apparatus and method of implementing the button generation function without using a mechanical button switch. Id. at 3:17-19. B. Cirque Corporation's 1994 GlidePoint® Touch Pad These representations by Apple in its patent application were categorically false when made. In May, 1994, nearly nine months before Apple filed the application, Cirque Corporation introduced its GlidePoint® touch pad product. That product was widely reported in the specialized press covering the computer industry. See id., Exs. G ­ S. Also widely reported were the significant features of that product ­ the ability to use brief "taps" on the touch pad surface to emulate mouse button clicks. See id. As discussed below, Mr. Della Bona testified that he was aware of the GlidePoint® product when it was introduced in 1994 and had read about it in computer magazines at the time. Apple and Mr. Della Bona were aware of the GlidePoint® touch pad for many reasons other than that press coverage. First, Apple licensed the technology underlying Apple's first touch pad (code named "Midas") from Cirque's predecessor company, Proxima. Id., Ex. T (Proxima license agreement) at 13. Soon after Cirque released the GlidePoint® touch pad, Mr. Della Bona and Cirque's founder and president engaged in correspondence regarding the interpretation of the license agreement with respect to Cirque's sale of the GlidePoint® touch pad and whether Cirque could acknowledge to the public that Apple's touch pad was based on Cirque's design. Id., Ex. U (Gerpheide letter). Second, on May 24, 2010 Apple produced the files from its attorneys relating to prosecution of the '218 patent. Elan found in those files detailed interface specifications for the GlidePoint® touch pad, dated July 7, 1994. Id., ¶ 5, Exs. D and E. Those specifications detail how the GlidePoint® used the tap, double tap and tap and drag gestures to emulate functions normally associated with mechanical buttons. For example, compare the following figures, one from the GlidePoint® specification, the other from the '218 patent:

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 On May 25, 2010 Elan took the deposition of Apple's inventor Mark Della Bona. DeBruine Decl., ¶ 3. In that deposition, Mr. Della Bona admitted that he was aware of the GlidePoint® product in the 1994 time frame when it was introduced, and had read the coverage of its introduction in the computer industry press. Id., Ex. B (Della Bona Transcript) at 76:23-77:10. Mr. Della Bona could not explain why the existence of Cirque's GlidePoint® touch pad as prior art was not disclosed to the Patent Office, except to contradict his previous testimony and claim he was "not aware." Id. at 102:3-10, 104:3-12. Nor could Mr. Della Bona explain why confidential specifications describing the salient features of that prior art product were found in his patent attorneys' files, but were not disclosed to the Patent Office. Id. at 102:17-104:12. C. Elan's Allegations For Its Inequitable Conduct Counterclaim Figure 2.5.3 from GlidePoint Serial/Parallel Interface Specification describing the operation of drag.

Elan filed its Answer and Counterclaims (Dkt. No. 118) in Response to Apple's May 25, 2010 Third Amended Answer on June 8, 2010, adding the '218 patent inequitable conduct allegations. DeBruine Decl., ¶¶ 2, 4. Based on the prosecution files and the deposition testimony, Elan's pleading identified Mr. Della Bona and the other '218 patent inventors and attorneys involved in prosecuting the '218 patent application as the specific individuals associated with the filing or prosecution of the application issuing as the '218 patent, who both knew of the material GlidePoint® product and deliberately withheld it and misrepresented the content of the prior art.
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Elan's pleading alleges that: the named inventors, in particular at least Mr. Mark Della Bona, knowingly made affirmative misrepresentations of fact and failed to disclose to the USPTO material information known to him. Id., Ex. C (Elan's Answer to Apple's Third Amended Answer), ¶ 80. Elan's pleading then identifies Apple's specific affirmative misrepresentation and explains why it is false. It goes on to explain how the GlidePoint® touch pad discloses specific elements and limitations in the '218 patent claims: In the patent application filed by Apple on January 31, 1995, which ultimately resulted in the '218 patent, the named inventors each knowingly, and with specific intent to deceive the USPTO, falsely represented that the prior art did not include any devices capable of using gestures on the touch sensor surface to emulate mechanical button values, but rather that prior art touch pads required mechanical buttons. Contrary to those representations, more than eight months prior to that filing, and at least as early as May, 1994, Cirque Corporation ("Cirque") announced and began commercial sales of its GlidePoint® touchpad product, which was widely known in the art to include "tap," "double-tap" and "tap and drag" gestures on the touchpad surface in lieu of activation of a mechanical button. Those functions were invoked based upon the time period of successive finger contacts with the touchpad and the time intervals between such contacts, as described and claimed in the '218 patent application. A reasonable examiner would have considered Cirque's prior art GlidePoint® touchpad material to the alleged inventions claimed in the '218 patent and not cumulative of the other art cited. Id. at ¶ 81. The pleading continues: At least one of the inventors of Apple's '218 patent, Mr. Della Bona, knew of the Cirque GlidePoint® product from contemporaneous press reports. On information and belief, Mr. Della Bona also knew that the GlidePoint® product was material to the patentability of the invention recited in the '218 patent, not cumulative to the other cited references and inconsistent with statements made to the USPTO. Id. at ¶ 82. Elan further alleged that: the other inventors named on the '218 patent, as well as others involved in the patent application, were also aware of the GlidePoint® product and its materiality to the alleged invention claimed in the '218 patent application and that the GlidePoint®
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prior art rendered statements made in the application false and misleading.

ARGUMENT Elan's Inequitable Conduct Allegations Plead With Particularity Sufficient to Satisfy FRCP 9(b) and the Exergen Standard Apple argues that Elan's inequitable conduct allegations lack the level of specificity

allegedly required by the Federal Circuit in its Exergen decision. Elan agrees that under the Federal Circuit's inequitable conduct pleading standard, the pleading must identify the "who, what, when, where, and how of the material misrepresentation or omission committed before the PTO." Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327-30 (Fed. Cir. 2009). Moreover, the pleading must also include "sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO." Id. at 1328. Elan's pleading does so. 1. Elan's Inequitable Conduct Allegations Plead With Particularity Who Made Material Misrepresentations and Withheld Material Information From the Patent Office

In Exergen, the Federal Circuit held the defendants' inequitable conduct allegations deficient under Federal Rule of Civil Procedure 9(b) ("Rule 9(b)") because the pleading only alleged that "Exergen, its agents and/or attorneys" had knowledge of the prior art '808 patent and '998 patent but withheld them, with the intent to deceive the PTO; that the '808 patent and '998 patent were material because they disclose some techniques related to the allegedly unenforceable '685 patent; and that arguments made by Exergen to the PTO to overcome the rejection of the '685 patent application were contradicted by statements from Exergen's own website. Id. at 1326. The Exergen standard requires only the identification of the specific individual associated with the filing of a specific patent. Exergen, 575 F.3d at 1329 (the pleading must "name the specific individual associated with the filing or prosecution of the application issuing as the '685 patent" (emphasis original)). Here, Elan specifically identified Mr. Della Bona, the other '218 patent
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inventors and attorneys involved in prosecuting the '218 patent application as the "who" of the material omissions and misrepresentation. See DeBruine Decl., Ex. C, ¶¶ 80-83. Elan's pleading clearly identifies the commercially available GlidePoint® product as the relevant material prior art.1 Mr. Della Bona knew that Cirque's GlidePoint® touch pad did exactly what is claimed in the '218 patent application to be Apple's invention: use contact and gap intervals to replace mechanical button clicks. Apple's attorneys also knew in detail, from the product specifications document dated in 1994, how the GlidePoint® product operated. Nevertheless, Mr. Della Bona signed, and Apple's attorneys filed, Apple's application on January 31, 1995, falsely stating the prior art touch pads required mechanical buttons to perform click, double click and click-and-drag operations. A deliberate, affirmative misrepresentation to the Patent Office is always material. Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1561 (Fed. Cir. 1983) (contrasting cases of withholding prior art with cases dealing with affidavits containing false and misleading data submitted to the patent office); General Electro Music Corp. v. Samick Music Corp., 19 F.3d 1405, 1411 (Fed. Cir. 1994) (holding false statement in a petition to make special is material if it succeeds in prompting expedited consideration of the application). 2. Elan's Inequitable Conduct Allegations Also Plead With Particularity Why the GlidePoint® Touch Pad Is Material and Not Cumulative Information

Elan's pleading also adequately stated why the GlidePoint® touch pad was highly material information that was knowingly withheld from the Patent Office. In doing so, Elan highlighted the GlidePoint® touch pad's ability to perform click, double click and drag functions in response to the tap, double tap and tap and drag gestures: GlidePoint® touchpad product . . . was widely known in the art to include "tap," "double-tap" and "tap and drag" gestures on the touchpad surface in lieu of activation of a mechanical button. Those functions were invoked based upon the time period of successive finger contacts with the touchpad and the time intervals between such contacts, as described and claimed in the '218 patent application.

That product, which was "known and used by others in this country" prior to the filing of the '218 patent application is itself prior art. See 35 U.S.C. §102(a).
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DeBruine Decl., Ex. C, ¶ 81. The same language also clearly explains the materiality of the GlidePoint® prior art: because it discloses using tap, double tap and tap and drag gestures on the touch pad surface instead of pressing a mechanical button, just as "described and claimed in the '218 patent." Id., Ex. A at 13:28-41. Information is material if "(1) it establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or (2) it refutes, or is inconsistent with, a position the applicant takes in (i) opposing an argument of unpatentability relied on by the Office, or (ii) asserting an argument of patentability." 37 C.F.R. § 1.56; Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309, 1314 (Fed. Cir. 2006). Elan properly pled at least two grounds of materiality. First, Elan alleged that the GlidePoint® product's functions were invoked based upon tap, double tap, and tap and drag gestures, as described and claimed in the '218 patent application. DeBruine Decl., Ex. C, ¶ 81. This allegation establishes, by itself a prima facie case of unpatentability of the invention claimed in the '218 patent as anticipated by prior art. 35 U.S.C. § 102(g)(2); Kalman v. Kimberly-Clark Corp., 713 F.2d 760, 771 (Fed. Cir. 1983) (one who seeks a finding of anticipation must show that "each element of the claim in issue is found, either expressly described or under principles of inherency, in a single prior art reference, or that the claimed invention was previously known or embodied in a single prior art device or practice"); In re Omeprazole Patent Litig., 483 F.3d 1364, 1371 (Fed. Cir. 2007) (anticipation requires disclosure of each and every claim limitation in a single prior art reference). Second, as discussed above, the existence of the GlidePoint® touch pad also refutes, or is inconsistent with, Apple's misrepresentation to the Patent Office in its application that "there is a need in the field of computer interfaces for an apparatus and method of implementing the button generation function without using a mechanical button switch," DeBruine Decl., Ex. F at 3:17-19, a position Apple again took in asserting an argument of patentability, see id., Ex. V (December 23, 1996 amendment) at 15. Apple's argument that "Elan's allegations do not identify the particular claim limitations present in the allegedly withheld reference or information that were material to patentability of the '218 patent" is misplaced. First, the Exergen decision involved a bare allegation that material
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information was withheld. Here, Elan alleges affirmative misrepresentations of fact, which alone is sufficient to plead inequitable conduct. Second, Elan's description of the reference and the claims is sufficient under Exergen. Exergen, 575 F.3d at 1329. Elan's pleading expressly identifies in paragraph 81 that the GlidePoint® touch pad employed tap, double tap and tap and drag gestures on the touch pad surface in lieu of activating a mechanical button. Elan's pleading also expressly alleges that these functions were invoked in the GlidePoint® touch pad based upon the time period of successive finger contacts with the touch pad and the time intervals between such contacts as described and claimed in the '218 patent. Finally, Elan's pleading identifies these as the relevant limitations in the '218 patent. Tellingly, Apple raises two highly misleading arguments to dispute on the merits the materiality of this prior art. First, it claims that the "mere existence of the GlidePoint® product" cannot be the basis for inequitable conduct because Apple disclosed the "existence" of the GlidePoint® product to the Patent Office. Apple's Mot. at 5:9-14. Apple supports this claim by pointing to its submission of an article including a brief review of the GlidePoint® product. Id. Unfortunately for Apple, there is a serious problem with this "disclosure": the Macworld article is dated February 1996 ­ more than one year after the '218 patent application was filed, and almost two years after Cirque introduced the GlidePoint® touch pad products. See id.; DeBruine Decl., Exs. G ­ S (GlidePoint®). Thus, rather than disclosing the GlidePoint® touch pad to the Patent Office as prior art, Apple's belated submission appears calculated to mislead the Patent Office into believing that the GlidePoint® was not prior art. Thus, submitting the February, 1996 Macworld article, rather than satisfying Apple's duty of candor, was an additional way in which Apple sought to mislead the Patent Office. Apple's makes another highly misleading claim in its motion. Apple notes that "[a] Cirque patent relating to this technology was also before the Patent Office during prosecution of the `218 patent." Apple Mot. at 5:19-21. Apple has chosen the words "related to this technology" very carefully. U.S. Patent No. 5,305,017 ("the '017 patent") relates only to methods of measuring an object's position on touch-sensor. See Greenblatt Decl., Ex. C ('017 patent) at 218 CFH 0196-97. The '017 patent never mentions the GlidePoint® touch pad, nor does it discuss any tap, double tap
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or tap and drag gestures emulating mechanical buttons. As such, it is no substitute for the required disclosure of these features Apple know to be present in the prior art GlidePoint® product. Apple is treating this Court as it treated the Patent Office, using incomplete and misleading statements to achieve its ends. 3. Elan's Inequitable Conduct Allegations Further Plead With Particularity A Factual Basis to Infer Intent to Deceive

Elan's pleading further provides with particularity the factual basis on which to infer that Mr. Della Bona, the other '218 patent inventors and others involved in prosecuting the '218 patent application had knowledge of the material information, and withheld and misrepresented this information with the specific intent to deceive the Patent Office. Apple contends that Elan is asking the Court to assume that an individual, who generally knew that a reference existed, also knew of the specific material information contained in that reference. Apple's Mot. at 6:20-22. Elan is not. Instead, the pleading also alleges that at least Mr. Della Bona had actual knowledge of the material information and its materiality. DeBruine Decl., Ex. C, ¶¶ 80, 82. The only logical inference is that Mr. Della Bona, who owed a duty of disclosure in prosecuting the '218 patent, knew of the tap, double tap and tap and drag gestures in the GlidePoint® product that is alleged to be material to the claims of the '218 patent. Exergen, 575 F.3d at 1330 (the pleading must provide factual basis to infer that any specific individual, who owed a duty of disclosure in prosecuting the patent at issue, knew of the specific information in the reference that is alleged to be material to the claims of the patent at issue). The pleading also alleges that Mr. Della Bona knew of the material information well before the filing of the '218 patent application. DeBruine Decl., Ex. C, ¶ 81. Elan has alleged that he nevertheless both 1) withheld this highly material information and 2) falsely represented to the Patent Office that "in order to perform click, double-click, and drag operations, prior art touch pads not only require the use of a touch pad but also require the use of a mechanical button switch." Id., ¶¶ 80-82; id., Ex. F at 3:6-8 (emphasis added). This is not the case where Apple accidentally failed to submit the GlidePoint® touch pad to the Patent Office during the prosecution of the '218 patent application. Having actual knowledge of the GlidePoint® product, and in particular, its use of the tap, double tap and tap and
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drag gestures to emulate mechanical button functions, Mr. Della Bona falsely represented to the Patent Office that the prior art did not include any devices capable of using gestures on the touch sensor surface to emulate mechanical button values, but rather that prior art touch pads required mechanical buttons. Id., Ex. C, ¶¶ 80-82. As the Federal Circuit has stated, there is no requirement that intent to deceive to be proven by direct evidence. See Molins PLC v. Textron, Inc., 48 F.3d 1172, 1180 (Fed. Cir. 1995) (because facts in inequitable conduct case rarely include direct evidence, "the intent element of the offense is therefore in the main proven by inferences drawn from facts); GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274 (Fed. Cir. 2001) (where the withheld information is material and the patentee knew or should have known of that materiality, he or she can expect to have great difficulty to establish subjective good faith to overcome an inference of intent to mislead"). The only inference that can be reasonably drawn from these facts is that Mr. Della Bona withheld and misrepresented the material information with a specific intent to deceive the Patent Office. See Exergen, 575 F.3d at 1329 ("A reasonable inference is one that is plausible and that flows logically from the facts alleged, including any objective indications of candor and good faith"). See also id. at 1331 (proper deceptive intent allegation must contain "specific factual allegations to show that the individual who had previously cited the '998 patent knew of the specific information that is alleged to be material to the '685 patent and then decided to deliberately withhold it from the relevant examiner"). Although based on information and belief, Elan's pleading alleges that the '218 patent inventors and prosecuting attorneys also had knowledge of the withheld material information and the materiality of that information. DeBruine Decl., Ex. C, ¶¶ 80, 82. Elan also alleges and intends to prove that the other inventors and the attorneys, while having knowledge of the GlidePoint® product, withheld this highly material information and misrepresented to the Patent Office that no such prior art existed. Id., ¶¶ 81, 83. As demonstrated above, the only logical inference is that they had knowledge of the material information, but nevertheless withheld and misrepresented this information with a specific intent to deceive the Patent Office. Elan's inequitable conduct allegations, being pled with particularity, satisfy the Exergen standard. Apple's Motion to Dismiss should be denied.
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B.

Apple's Motion Should Be Denied Because Elan's Pleading Provides Far More Than Vague Allegations of Apple's Inequitable Conduct The court in Exergen dismissed the inequitable conduct defense because the pleading did

not state with particularity all of the "who, what, when, where, and how of the material misrepresentation or omission committed before the PTO" requirements. Exergen, 575 F.3d at 1329-30. Moreover, the pleading in that case also failed to provide any factual basis for the court to reasonably infer that any specific individual had knowledge of the withheld material information or of the falsity of the material misrepresentation, and that individual's specific intent to the deceive the PTO. Id. at 1330. Not surprisingly, Apple provides no legal authority or plausible factual argument to support its claim that "[e]ach of these [alleged] deficiencies provide an independent basis for dismissing Elan's pleading." Apple's Mot. at 4:9-10. The inequitable conduct allegations in Exergen were not dismissed based on the finding a single deficiency in the pleading. Rather, they were dismissed because they were vague and cursory on every required element. Cal. Inst. of Tech. v. Canon U.S.A., 2009 U.S. Dist. LEXIS 126174 (C.D. Cal. Oct. 26, 2009) supports Elan's position. Applying the Exergen standard, the Canon court denied the defendant's motion to strike the plaintiff's affirmative defense of inequitable conduct even though the pleading did not specifically name the individuals alleged to have committed inequitable conduct. Id. at *9 The court noted that the pleading did allege sufficient material misrepresentations and omissions, and held the pleading to be sufficient under Rule 9(b), where "it does far more than provide vague allegations that someone at Caltech was aware of the existence of these works." Id. Because Elan's inequitable conduct allegations against Apple also provide far more than vague allegations, Apple's motion should be denied. C. Even If the Court Holds Elan's Inequitable Conduct Allegations Insufficient, Elan Should Be Permitted to Amend Its Pleading While Elan disagrees with Apple's claim that Elan's pleading does not state with particularity satisfying the Exergen standard, Elan urges the Court to accept Apple's suggestion that, at a minimum, Elan should be allowed to amend its pleading in the event the Court finds Elan's pleading to be inadequate. This is consistent with the spirit of the Federal Rule of Civil
ELAN'S OPPOSITION TO APPLE'S MOTION TO DISMISS ELAN'S INEQUITABLE CONDUCT DEFENSE AND COUNTERCLAIM

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Case No. 09-cv-01531 RS

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Procedure 15(a)(2), that leave to amend shall be freely given with the opposing party's written consent or when justice so requires. Lee v. U.S. Bank, 2010 U.S. Dist. LEXIS 66182, *6 (N.D. Cal. June 30, 2010); Johnson v. Regents of the Univ. of Cal., 2010 U.S. Dist. LEXIS 63963, *17 (N.D. Cal. June 28, 2010). IV. CONCLUSION Elan's Counterclaim for Inequitable Conduct pleads the specific facts on which its claim of inequitable conduct is based with particularity sufficient to satisfy Rule 9(b). As such, the Court should deny Apple's Motion to Dismiss Elan's Inequitable Conduct Defense and Counterclaim. In the alternative, should the Court require additional detail, Elan should be granted leave to amend. DATED: July 15, 2010 Respectfully submitted, ALSTON & BIRD LLP

By:

/s/ Sean P. DeBruine Sean P. DeBruine Attorneys for Plaintiff ELAN MICROELECTRONICS CORPORATION

LEGAL02/31996359v3

ELAN'S OPPOSITION TO APPLE'S MOTION TO DISMISS ELAN'S INEQUITABLE CONDUCT DEFENSE AND COUNTERCLAIM

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Case No. 09-cv-01531 RS